The American Health Care Act (AHCA) and its Potential Effect on Medicaid

The last few months have involved a flurry of activity from both President Trump and Congress over the issue of health care.  The House Republicans in Congress have been working on legislation to repeal and replace the Affordable Care Act (“ACA”) also known as ObamaCare. In early May, they passed their version of the American Health Care Act (“AHCA”) which would repeal much of the ACA provisions.  The House bill is now with the Senate, and major revisions to the AHCA are expected.

Although there are other provisions of the current version of the AHCA that potentially will impact you, your loved ones or friends, including health insurance coverage for preexisting conditions, we wanted to highlight a few of the changes that have not received much attention in the press.

What you may not be aware of are the other parts of the AHCA that pertain to Medicaid eligibility for seniors, persons with disabilities, and others who may have limited means and need help paying for insurance or care. The AHCA would significantly alter the way Medicaid is currently handled and paid for. Under the current version of the AHCA, states would be given a set amount of money from the federal government for each Medicaid beneficiary based on past number of enrollees and spending.  This is referred to as a per capita cap. The states would then pay for Medicaid benefits, and when the federal money runs out, the states would have to pay the remaining costs. Some commentators have expressed concern that many otherwise eligible applicants will not be able to qualify for Medicaid due to lack of state funds, and those same people will not be able to afford to pay for care on their own.

The current version of the AHCA would also eliminate retroactive coverage for a Medicaid applicant who is unable to submit an application right away. Currently, an applicant has 3 months to file an application and still get retroactive coverage as long as the applicant was eligible during that time. It is often time consuming to obtain all of the paperwork necessary to submit a Medicaid application so this allowance provides a safety net for applicants who are unable to submit an application immediately.

We will update this information if and when further changes are made and the Act is put into place.

Jon